A guide to payment methods

A guide to payment methodsBusinesses can use this guide to discover, understand, and select the right payment methods for them to reach a broader audience.

By Gabriel Hubert Last updated on June 20, 2017

A guide to payment methods 2

Introduction

1. Deciding on the right payment methods

1.1. Starting from the customer

Supported by widespread access to high speed internet and the insatiable appetite of

customers for convenience, online commerce is progressing rapidly around the world and

estimated to reach $4T (Source: eMarketer) in 2020. But when it comes to payments online,

businesses expanding internationally and taking advantage of the increased reach that online

commerce provides them with are met with widely varying customer preferences. Not only

can delivery terms be quite different (pay after delivery, for example, common in Europe and

Asia, requires businesses to only expect payment once they’ve shipped goods) but the payment

methods used for online transactions themselves vary too. Credit and debit cards, not always

the most trusted option, only account for half of online transactions globally. Bank payments,

digital wallets, and cash are in strong customer demand, and can even offer additional benefits

to businesses such as lower risks and transaction costs.

To fully realize the potential of online commerce, businesses must adapt to an eclectic audience

and harness this diversity of payment preferences. This guide underlines the characteristics of

payment methods that intrinsically determine their relevance to a given business model, helps

identify questions that businesses should ask when considering adding payment methods to

their checkout, and provides an overview of the payment methods Stripe supports.

As businesses seek to increase their audience, robust payment method coverage can play

the role of a catalyst. Whether to improve conversions in their domestic market, or to achieve

successful geographical expansion, businesses’ ability to adapt the options available to

customers at the time of checkout to their preferences is key. But depending on the nature of a

given transaction, certain payment methods may be relevant or not depending on their specific

characteristics. Businesses should take into account their business model and operational

constraints to evaluate the value, to them in particular, of additional payment methods.

As mentioned previously, the relevance of a payment method will depend on the geographic and

demographic audience a business is looking to reach.

Payment method fragmentation varies strongly by geography. While some payment methods,

such as major credit cards brands, have become internationally available, others have remained


confined to a single country, or even a single segment of the population in that country.

Therefore, identifying their target audience is an important first step for businesses to decide

which payment options to focus on. The distribution of payment methods used in online

commerce varies dramatically by region of the world, but also within specific regions.

Another consideration driving payment decisions is the business model itself. Some payment

methods, popular digital wallets for example, are designed for individual consumers and limit

support for large transaction amounts or business-to-business payments. Others, like invoicing

via bank transfers, are inconvenient for instantaneous mobile purchases and best suited for

business-to-business transactions. For a given business vertical, the specific order value of

transactions can further play a role: for example, retail companies with higher average order

value transactions may consider offering a consumer credit payment option at checkout to

increase conversions.

As an example, while major brand credit cards are used for more than 80% of online transactions

in France, this figure is less than 25% in neighboring Germany. Meanwhile, in Germany, bank-

based payments (direct debit or credit transfers) are used for almost 40% of purchases and no

single payment method in Germany makes up more than 25% of online purchases.


Finally, customer preferences may have deeper roots that businesses should be sensitive to. In

certain markets such as Poland, for example, customers have traditionally relied on digital wallets

to limit businesses’ ability to store payment credentials for further use. This has supported the

rise of payment processing options such as PayU or Prezlewy24 which process transactions

without enabling businesses to retain payment details after a customer’s checkout.

1.2. Keeping the checkout experience in mind

Given the specific properties of payment methods, businesses may have to adapt their checkout

to support them.

A first element of consideration is currency handling. Indeed, certain payment methods only

support payments in a limited number of currencies, and ensuring that customers see a price

they can relate to all through their purchase experience, especially as they select their payment

method, is important. This is the case with iDEAL for example, a popular payment method in the

Netherlands for which businesses need to create Euro-denominated transactions.

Beyond this, the customer journey at checkout may need to be adapted. Payment methods

that involve redirecting customers to another app or site to complete their payment fall in this

category. As an example, payments with popular Chinese wallet Alipay will include a mandatory

redirect to a separate webpage where customers will be prompted to enter in additional

credentials. This requires the business to have robust order management in place, so as to

provide customers who fail to complete a redirect with a consistent experience. More generally,

redirects will limit businesses’ ability to control their customer’s checkout from end-to-end: while

they may complete their payment, they may never return to the original site, and any effort to

collect additional information from them should be completed ahead of the payment.

Furthermore, payment methods may limit the possibility to complete payments without a

customer’s explicit confirmation, a hindrance for subscriptions. With payment credentials

accessible to a business, recurring charges can be handled seamlessly at a time designated by the

business. For some payment methods however, it is a requirement that customers confirm each

individual transaction, thus making recurring charges more difficult. Therefore, businesses that

rely on generating payments “in the background” without a customer’s direct involvement will

need to adapt the experience they provide in order to support payment options that allow for

recurring payments.


1.3. Managing risk, fraud, and disputes

1.4. Understanding the true cost to support payment methods

Businesses can anticipate and manage the risks associated with accepting payments online by

choosing payment methods that match their risk preferences. As a general rule, the better the

level of authentication required of a customer at the time of payment, the lower the likelihood

of fraudulent payments with that payment method.

Businesses need to take into account which payment options may increase the likelihood

of fraudulent transactions, and where liability rests in the event of disputed payments. The

credentials required to complete transactions with some payment methods can be stolen

and used without their rightful owner’s consent. This is the case for bank account details

or credit card details. For this reason, payment schemes provide customers with the ability

to dispute payments made using their credentials, and funds may be automatically recovered

from businesses. Other payment methods, however, require that customers execute payment

instructions themselves, with an authentication step that makes it unlikely the instructions

weren’t indeed sent by them. These payments are generally irrevocable. Bank credit transfers,

where customers push funds to a specific bank account from their own bank account, are

an example of such payment method. These payment options don’t relieve businesses of

the responsibility to deliver products and services as expected, but it gives them more

control over the management of disputes and exceptions, as the funds can’t be taken from

them automatically. Event ticket companies and online marketplaces for luxury goods, for

understandable reasons, are examples of businesses with a strong preference for authenticated

or irrevocable payment methods.

Businesses will need to holistically take into consideration the costs and benefits of adding

payment methods to their checkout.

First and foremost, businesses need to anticipate the cost of the technical integration of an

additional payment method itself. This, as we’ve shown above, can include more than the simple

inclusion of a new payment option logo on a business’s website: it may also impact the range

of currencies that the price needs to be displayed in, the design of the checkout flow itself, and

even—as we’ll see later—the expected timeline to fulfill completed orders.

Businesses should also account for the ongoing internal costs borne to support operations with

multiple payment methods. Transaction monitoring, payments reconciliation, and customer

support associated with new payment methods are examples of internal costs tied to the

management of multiple payment options. Controlling how transaction reports are generated,

the way in which funds are collected, or even how refunds are initiated and managed are


important elements to appreciate here.

Last but not least, payment methods have inherently different cost transaction structures which

should be taken into consideration given the business model, margin, and average transaction

value of a specific business.

2. Payment method taxonomy

Given a payment method, three questions can help businesses better understand the checkout

experience their customers will have using it, as well as the implications of accepting it.

The customer provides payment details to the business, who can initiate payments at their

own convenience. This is the case for credit card payments for which only the card details

are required, or bank direct debit payments for example. Importantly, in the case of business-

initiated payments, a business may not have the ability to formally confirm that either the

customer authorized the transaction, nor that the payment details were indeed provided by

their owner. As detailed above, these payment methods can present additional risks of fraud

and disputed or revoked payments for businesses.

The customer both provides payment details and authenticates that they are the owner of

these payment details. Examples include payment methods that have customers receive

and type a one-time password, or that require customers to log in to their account on a

separate app or website. These payments often require more complex checkout experiences,

and require the explicit intervention and consent of customers for each payment but—as

we’ve seen—offer businesses additional guarantees that the payment details weren’t used

fraudulently, shifting the burden of liability away from them in the case of disputes.

2.1. How is the payment completed?

BUSINESS-INITIATED

CUSTOMER-AUTHENTICATED

A challenge for businesses accepting payments online is to ensure that they can provide a

pleasant payment experience for their customers. A business can distinguish between three

types of payments, which will shape the flow of their checkout:

1

2


The customer is required to take all the necessary steps in order to send funds themselves to

a receiving “destination” specified by the business. This is the case for bank credit transfers,

in which the “destination” provided is simply a bank account. Bitcoin payments are also

customer-initiated, as the customer is given a particular address to send funds to. As these

payment methods require the customer to take action, there may be additional delays in

payments being received. However, an important benefit to businesses is that they are in

principle irrevocable by customers: funds received cannot be taken back inadvertently.

CUSTOMER-INITIATED3

The confirmation of payment completion happens at the time of checkout. This is the case

for credit card payments: businesses receive notice from the card network that the payment

was successful, and can proceed to fulfill the order. This does not mean that the funds

have actually been received by the business yet (a step which can take days). Rather, it’s an

authoritative message from the payment method to confirm that the eventual settlement

of the transaction will occur.

The completion of a payment is communicated to a business hours, days, sometimes weeks

later. In these cases, businesses will need to decide whether or not to fulfill “optimistically” at

the time of checkout or wait until they’ve received payment confirmation to proceed, since

the payment can still ultimately fail. As an example, bank direct debit payments—where the

business pulls funds from the customer’s bank account—require several days after a payment

is initiated for the customer’s bank to accept or reject the debit. Similarly, bank credit

transfers—payments in which the customer sends funds to a bank account—are also delayed

to either the end of day, or next day. (While end-of-day or next-day credit transfers are

still the norm in the US, close to real-time credit transfers schemes are progressively being

introduced worldwide, such as the Faster Payments System in England, or Faster Payments in

Singapore. Wire transfers, which are sent on a dedicated network, are also close to real-time.)

In the meantime, businesses need to architect the checkout flow to let the customers know

that their order has been received and again notify them of fulfillment once the confirmation

has been received.

2.2. How do businesses learn they’ll be receiving funds?

IMMEDIATE CONFIRMATION

DELAYED CONFIRMATION

An important step in an online purchase experience for businesses is the decision to fulfill an

order. This is generally done once the business receives a confirmation that gives them sufficient

confidence that the payment has been completed by the customer and that funds from the

transaction will eventually be paid out to them. A business can distinguish between two cases:

1

2


Having the ability to store a customer’s payment credentials (keeping them “on file”) gives

businesses the latitude to create business-initiated payments as described above, without

requiring any additional effort of their customer. Card payment details (without the use

of 3D Secure or CVC) can be considered “reusable” since a customer, once having provided

them, is not required to take further action for future payments. Bank direct debit payments,

in which the customer provides their bank account details for the business to debit from, are

also made using “reusable” payment details.

In these cases, the customer decides on the successful completion of each payment. The

easiest example would be cash: a business only receives funds if and when the customer

hands the money towards them. Other examples of single-use payments include bank credit

transfers where the customer gives a one-time instruction to their bank to send funds to a

recipient bank account. Both customer-initiated and customer-authenticated payments are

“single-use”: the customer needs to explicitly authorize each transaction, either by creating

the payment themselves, by signing in to an app, or by typing in a one-time passcode.

Businesses will not be able to make further use of the payment details provided by the

customer, and will need to rely on them authorizing future payments individually.

2.3. Can the payment credentials be stored on file and reused?

YES, PAYMENT DETAILS ARE REUSABLE

NO, PAYMENT DETAILS ARE SINGLE-USE

Businesses that offer subscription services and those looking to optimize the checkout

experience for future transactions will want to consider whether or not the payment details

can be stored on file and reused. Two cases are to be taken into account:

The above three questions can help to categorize unfamiliar payment methods for businesses,

and help them decide whether or not they are likely a good fit for their specific business. Later,

we’ll use these properties to describe the payment methods Stripe supports.

1

2


3.1. Mobile commerce

3.2. On-demand economy

3.3. Software-as-a-service and non-profits

Businesses built around mobile commerce experiences focus on ease of conversion with limited

screen real estate and ease of data input at checkout. Payment methods for which customers

have a mobile app installed can offer a simple purchase experience, all while providing the

benefit of reduced fraud with verified payments, as customers confirm their payment from the

app. These payment method apps—such as Alipay in China, Bancontact in Belgium, or Klarna in

Sweden—offer fallback mobile web payment experiences for customers who haven’t installed

the app, with the same payment guarantees.

With instantaneous fulfillment at the heart of their experience, on-demand economy businesses

need to encourage conversion—often on mobile—while managing fraud risk. Payment methods

that offer immediate confirmation that the transaction was successful are a priority for the on-

demand economy. Storing payment details on file to enable one-tap confirmations, as is the case

with credit cards or even bank direct debit payments will further enable businesses to shorten

the checkout experience.

Software-as-a-service businesses and nonprofits alike focus on subscriptions as well as larger

payments that may be settled by bank transfer. Supporting reusable payment details such

as credit cards and bank direct debit payments facilitates charging customers or donors on

a regular basis. Meanwhile, supporting bank credit transfers in countries where enterprise

customers are based also enables higher order value payments to be settled at lower cost, in an

irrevocable way. For a software-as-a-service business, offering additional payment methods is

often one of the only barriers to increasing the conversion potential of its audience.

3. Industry considerations

Customers expect greater speed and convenience when interacting with businesses online.

Enabling the best customer experience requires taking the business’s vertical, the primary

interaction channel, and the business’s risk preferences into account. Below are a few guidelines

that businesses can take into consideration.


4.1. Quick and simple onboarding

4.2. The easiest way to integrate a new payment method

Adding payment methods is a tedious and complex process that requires businesses to establish

both a contractual and operational relationship with the payment scheme that can take weeks.

This involves company due diligence, review of technical specs, and negotiation of commercial

and payout terms, to name a few. Stripe wants to makes this process a lot simpler so businesses

can quickly add and scale payment method support without laboring through a new process

each time. For an active user, Stripe’s onboarding process only requires activating the desired

payment method in the Stripe Dashboard. This means no one-off onboarding process, no lengthy

underwriting timelines, and no effort spent on tedious contract negotiations. This in turn allows

businesses to be more efficient with software and business development resources. A simplified

onboarding is especially valuable for platforms and marketplaces that wish to give access to

various payment methods to their “sellers”: each seller will benefit from the same streamlined

activation.

Supporting additional payment methods is fraught with technical integration risks and

complexity. This is particularly true if each payment method requires integrating either a

new API or a new payment service provider. To reduce the risks and complexity of technical

integration, Stripe’s Sources API supports accepting any payment method—both cards

and non-cards—through a single API. This means businesses can develop against a unified

framework that allows them to easily scale support for all payment methods. The only efforts

required to add a new payment method are consistent and reduced code changes, sometimes

even as limited as a single line of code. This leaves businesses with a simple and elegant

integration that involves minimal development time and remains easy to maintain, regardless of

which payment methods they choose to implement.

4. Why Stripe?

Businesses should carefully weigh the following considerations as they evaluate integration

solutions to support additional payment methods: ease of onboarding, ease of integration, and

ongoing operational complexity of multiple payment methods.

4.3. Unified monitoring, reporting, and payouts for all payment methods

Payments made with any payment method using the Sources API, including cards, will appear

consistently in the Stripe Dashboard, largely reducing operational complexity and allowing for

lightweight financial reconciliation. This enables businesses to develop standardized processes


for typical operations such as fulfillment, customer support, and refunds. These payment

methods also work with the rest of the Stripe stack so you can enable them for subscriptions

or as part of a Connect platform. With Stripe Connect in particular, the ability for platforms to

manage the access of multiple payment methods for each of the marketplace members, while

controlling their boarding experience, is a key advantage. Lastly, since Stripe abstracts away the

complexity of dealing with each payment method provider, businesses also benefit from one

single point of escalation and accountability on elements such as disputes or other exceptions

they may need to address when working with payment methods from around the world.


5. Payment method fact sheets

ACH credit transfers

The Automated Clearing House (ACH) network in the

US enables customers to send funds from their bank

account to a US-domiciled bank account. To collect a

payment with ACH credit transfer, businesses provide

a routing and account number to their customer,

who then initiates the payment from their bank

account.

Transactions via ACH credit transfer are irrevocable

and low cost, making them suitable for business

models looking to avoid disputed payments or

high transaction fees. For this reason, ACH credit

transfers are common with business-to-business

and high average order value business-to-consumer

transactions. Since September 2016, the ACH

network has introduced same day ACH credit

transfers allowing for the accelerated movement

of funds from customers’ accounts: payments are

cleared twice a day and can be received the same day

by businesses’ bank.

RELEVANT PAYER GEOGRAPHY

US

PAYMENT METHOD TYPE

Bank Transfer

PAYMENT COMPLETION

Customer-initiated

PRESENTMENT CURRENCY

USD

PAYMENT CONFIRMATION

2-3 business days

DISPUTES

No

REFUNDS / PARTIAL REFUNDS

Yes / Yes

RECURRING PAYMENTS

Requires payer action

SUPPORTED BY STRIPE

Yes

SIMIL AR PAYMENT METHODS

SEPA Direct Debit

CUSTOMER-FACING FLOW

Selects ACH credit at

checkout

Sends money to

business’s bank

Receives business’s bank

details for payment

Receives confirmation of

funds sent


ACH debits

Direct debit payments on the Automated Clearing

House (ACH) network, or ACH debits, allow

businesses to collect funds from their customers in

the US who provide their bank account details and

authorize businesses to debit them. Confirmation for

ACH debit payments is delayed and can take up to 5

business days.

ACH debits can fail, or can be disputed by customers

after the payment was initially completed. Businesses

should carefully consider accepting ACH debit

payments. Software-as-a-service subscriptions or

regular donations to not-for-profit organizations are

examples of business models adapted to ACH debits.

Some of the risks associated with ACH debits can

further be mitigated by using third party services to

verify the ownership of account credentials.


US

PAYMENT METHOD TYPE

Bank account debit

PAYMENT COMPLETION

Business-initiated


USD


5 business days

DISPUTES

Yes


Yes / Yes

RECURRING PAYMENTS

Yes

SUPPORTED BY STRIPE

Yes


Selects ACH debit at

checkout

Enters bank account

details

Recieves payment

initiation confirmation


Alipay

Alipay is a popular digital wallet in China, operated

by ANT Financial Services Group, a financial services

provider affiliated with Alibaba. Launched in 2004,

Alipay currently has over 450 million active users.

Businesses looking to grow their presence with the

increasingly active Chinese audience transacting

online both within China and around the world

should consider offering Alipay.

Chinese consumers using Alipay transact most

frequently in e-commerce, travel, online education,

online gaming, and food/nutrition. Alipay wallet

holders can pay on the web or on mobile using their

login credentials or their Alipay app. Another benefit

of Alipay lies in the reduced risk of fraud: payments

are authenticated with the customer’s login

credentials and dispute rates are very low.


China

PAYMENT METHOD TYPE

Digital wallet

PAYMENT COMPLETION

Customer-authenticated


USD, EUR, GBP, CAD, AUD, SGD, HKD, JPY,

NZD


Immediate

DISPUTES

Limited


Yes / Yes

RECURRING PAYMENTS

Yes

SUPPORTED BY STRIPE

Yes


WeChat Pay


Selects Alipay at

checkout

Gets redirected to

Alipay and scans QR

code

Enters code from

mobile into redirect

page

Gets notification

that payment is

complete

(Optional) Returns

back to business’s

site


Android Pay

Android Pay is a digital wallet launched in 2015 that

enables customers to pay using their Android phone,

tablet, and watch. Android Pay does not allow users

to hold a balance, but rather lets them store credit

or debit cards to their device and use them to make

payments online. It eliminates the need for users

to remember and manually enter their payment

information.

To make a payment online, customers select Android

Pay as the payment method and authorize the

transaction via fingerprint ID or PIN. In addition to

payment information, a business can request the

customer’s billing and shipping address, and contact

information. Supporting Android Pay reduces the

friction points of the checkout process and increases

conversions for businesses with conversions from

Android mobile devices or an Android mobile app.


Where Android Pay is supported

PAYMENT METHOD TYPE

Digital wallet

PAYMENT COMPLETION



USD, GBP, EUR, AUD, HKD, SGD, NZD


Immediate

DISPUTES

Yes


Yes / Yes

RECURRING PAYMENTS

Yes

SUPPORTED BY STRIPE

Yes


Apple Pay


Selects Android Pay at

checkout

Enters Android Pay

credentials

Gets notification that

payment is complete


Apple Pay

Apple Pay is a digital wallet that enables customers

to pay using payment details stored on their iPhone,

iPad, or Apple Watch. Launched in 2014, Apple Pay

lets users add credit or debit cards which can be

used to make payments in IOS mobile apps. In 2016,

Apple extended support for Apple Pay to include web

payments on Safari on iPhone, iPad, or Mac OS.

To make a payment online, customers select Apple

Pay as the payment method and authorize the

transaction via Touch ID, PIN, or a passcode. In

addition to payment information, customers can also

store their billing and shipping address, email, and

phone number. By automatically providing relevant

customer information at the time of payment, Apple

Pay reduces checkout friction and can meaningfully

increase conversions for businesses driving

transactions from their iOS mobile app or a website

visited on the Safari browser.


Where Apple Pay is supported

PAYMENT METHOD TYPE

Digital wallet

PAYMENT COMPLETION



USD, GBP, EUR, AUD, CHF, HKD, SGD


Immediate

DISPUTES

Yes


Yes / Yes

RECURRING PAYMENTS

Yes

SUPPORTED BY STRIPE

Yes


Android Pay

CUSTOMER-FACING MOBILE FLOW

CUSTOMER-FACING WEB FLOW

Selects Apple Pay at

checkout

Selects Apple Pay at

checkout

Enters Apple Pay

credentials (Touch ID)

Enters Apple Pay

credentials (Touch ID)


payment is complete


payment is complete


Bancontact

Bancontact, founded in 1979 and formerly know

as Bancontact/Mister Cash, is a leading payment

method in Belgium, where it is used in up to a

third of online transactions. Bancontact payments

are authenticated by customers and immediately

confirmed to businesses. Bancontact is offered

as a payment option by more than 80% of online

businesses in Belgium, and processed more than 27

million payments in 2015.

In 2014, Bancontact introduced a mobile application

to streamline its payment experience. Using their

mobile app, customers can identify by scanning a

QR code presented at the time of payment. Each

transaction is then confirmed with a PIN. The app

has seen a successful rollout and is used in more

than 50% of transactions on desktop, and 90% of

transactions on a mobile or tablet device Ecommerce

and on-demand platforms are businesses for which

Bancontact is an adapted checkout option.

While Bancontact payment details are single-use,

each transaction can allow businesses to retrieve

the bank account details of customers, enabling

subsequent payments to be completed via SEPA

Direct Debit with the appropriate mandate

authorization.


Belgium

PAYMENT METHOD TYPE

Authenticated bank debit

PAYMENT COMPLETION



EUR


Immediate

DISPUTES

No


Yes / Yes

RECURRING PAYMENTS

Require payer action, or via SEPA Direct

Debit

SUPPORTED BY STRIPE

Yes


Giropay, iDEAL


Selects Bancontact at

checkout

Gets redirected to

Bancontact and enters

credentials


payment is complete

(Optional) Returns back

to business’s site for

payment confirmation


Bitcoin

Bitcoin is a cryptocurrency invented in 2009 by an

individual or group under the pseudonym Satoshi

Nakamoto and released as open source software in

2009.

Bitcoin payments are peer-to-peer, and do not

involve an intermediary institution like a bank

or payment scheme. All Bitcoin transactions are

recorded in a distributed ledger, the blockchain.

Bitcoin payments are irrevocable: payers send the

designated amount to a recipient address with no

ability dispute the payment at a later date. Hundreds

of thousands of businesses now accept Bitcoin as a

form of payment on their site.

Particularly attractive to a global crowd of

digital enthusiasts, Bitcoin can be a compelling

payment method to businesses looking to reach

a technologically-focused audience around the

world. The immediacy of confirmation of Bitcoin

payments and their irrevocability also provide strong

guarantees to businesses with risk-averse business

models.


Global

PAYMENT METHOD TYPE

Cryptocurrency

PAYMENT COMPLETION

Customer-initiated


USD


Immediate

DISPUTES

No


Yes / Yes

RECURRING PAYMENTS

Require payer action

SUPPORTED BY STRIPE

Yes


Selects Bitcoin at

checkout

Receives Bitcoin address

for payment

Sends from Bitcoin wallet Gets notification that

payment is complete


Cards

Cards (Visa, Mastercard, American Express, Discover,

Diners Club, JCB) are a dominant payment method

globally. Credit cards are issued by banks and allow

customers to borrow money with a promise to pay

it back within a grace period to avoid extra fees.

Consumers can accrue a continuing balance of debt,

subject to being charged interest on the amount.

Debit cards offer the convenience of card payments

but are linked to a bank account, where funds are

drawn directly from the linked account at the time of

payment.

Visa and Mastercard are the largest card networks

in the world. Both function exclusively as payment

processing systems and do not issue cards to

consumers directly. Instead, they allow banks and

financial institutions to brand and distribute their

cards. American Express is also a payment processing

system that—unlike Visa and Mastercard—issues its

own cards directly to consumers. American Express

is generally adapted to high value shoppers, as the

average cardholder spend is higher than Visa or

Mastercard cardholders.


Global

PAYMENT METHOD TYPE

Card

PAYMENT COMPLETION

Business-initiated


135+


Immediate

DISPUTES

Yes


Yes / Yes

RECURRING PAYMENTS

Yes

SUPPORTED BY STRIPE

Yes


Selects credit card at

checkout

Enters credentials Gets notification that

payment is complete


Giropay

Giropay is a German payment method based on

online banking and introduced in 2006. It allows

customers of most Sparkassen and cooperative

banks in Germany to complete transactions online

using their online banking environment, with funds

debited from their bank account. Depending on their

bank, customers confirm payments on Giropay using

a second factor authentication or a PIN. Payments

are immediately confirmed to the business and

irrevocable.

Giropay accounts for just under 10% of online

checkouts in Germany, and is suited to business

models that require the funds to be guaranteed.


Germany

PAYMENT METHOD TYPE


PAYMENT COMPLETION



EUR


Immediate

DISPUTES

No


Yes / Yes

RECURRING PAYMENTS

No

SUPPORTED BY STRIPE

Yes


Bancontact, iDEAL


Selects Giropay at

checkout

Gets redirected to

Giropay and enters

bank details

Receives SMS on

mobile and enters

into redirect page

Gets notification

that payment is

complete

(Optional) Returns


site for payment

confirmation


iDEAL

iDEAL is a Netherlands-based payment method that

allows customers to complete transactions online

using their bank credentials. All major Dutch banks

are members of Currence, the scheme that operates

iDEAL, making it the most popular online payment

method in the Netherlands with a share of online

payments close to 55%.

In order to pay with iDEAL, customers are redirected

to their online banking environment where they can

authenticatet the payment using a second factor

of authentication. The exact experience customers

go through will depend on their bank. While the

iDEAL payment flow may not appear seamless to

some businesses discovering it, it is well understood

and appreciated by Dutch customers. Payments are

irrevocable and immediately confirmed, two strong

value propositions of iDEAL for businesses.

While iDEAL payment details are single-use, each

transaction can allow businesses to retrieve the bank

account details of customers, enabling subsequent

payments to be completed via SEPA Direct Debit

with the appropriate mandate authorization.


The Netherlands

PAYMENT METHOD TYPE


PAYMENT COMPLETION



EUR


Immediate

DISPUTES

No


Yes / Yes (on Stripe)

RECURRING PAYMENTS

Require payer action, or via SEPA Direct

Debit

SUPPORTED BY STRIPE

Yes


Bancontact, Giropay


Selects iDEAL at checkout

Completes authorization

process (with scanner or SMS)

Gets redirected to iDEAL and chooses bank or

gets redirected to bank straight away

Gets notification that payment is

complete

Enters account

credentials

(Optional) Returns back to

business’s site for payment

confirmation


SEPA Direct Debit

The Single Euro Payments Area (SEPA) is an initiative

of the European Union to simplify payments within

and across member countries. They established and

enforced banking standards to allow for the direct

debiting of every EURO-denominated bank account

within the SEPA region.

In order to debit an account, businesses must collect

their customer’s name and bank account number in

IBAN format. As part of their payment confirmation,

customers must accept a mandate that gives the

business an authorization to debit the account.

Stripe is able to generate this mandate for businesses

to present to their customers.

Customers are able to dispute a SEPA Direct Debit

transaction within 8 weeks on a “no questions asked”

basis: funds will automatically be returned to them.

Beyond that point and over the following eleven

months, they are still able to dispute transactions

that were not backed by an appropriately authorized

mandate. During that period, the arbitration process

involves both the bank of the creditor (business) and

the customer (debtor). After 13 months, disputes are

no longer possible.

SEPA Direct Debit is an important method for any

business interested in recurring billing.

RELEVANT PAYER GEOGRAPHIES

France, Germany, Spain, Belgium,

Netherlands, Luxembourg, Italy, Portugal,

Austria, Ireland

PAYMENT METHOD TYPE

Bank debit

PAYMENT COMPLETION

Business-initiated


EUR


6 business days

DISPUTES

Yes


Yes / Yes

RECURRING PAYMENTS

Yes

SUPPORTED BY STRIPE

Yes


ACH debits


Selects SEPA Direct Debit

at checkout

Provides full name and

IBAN and authorizes

mandate


payment is complete


SOFORT

SOFORT is a bank transfer-based payment method

with significant market share in Germany and

Austria. In order to pay with SOFORT, customers are

redirected to SOFORT’s site where they enter their

bank login credentials. Upon authentication, SOFORT

initiates a bank credit transfer from their bank

account.

One important detail for businesses to realize is that

although successful authorization indicates a very

high likelihood of payment, funds are not guaranteed

to businesss until they are actually received, which

is typically 2 business days later (but can be up to

14 days later). Once received, payments cannot be

reversed except by Business-initiated refunds. For the

sale of low value or high margin items, businesses

typically consider the initial authorization to be

authoritative and do not wait for the receipt of

funds.


Germany, Austria

PAYMENT METHOD TYPE

Bank credit transfer


EUR

PAYMENT COMPLETION



Immediate directional confirmation;

definitive confirmation delayed by typically 2

but up to 14 business days

DISPUTES

No


Yes / Yes

RECURRING PAYMENTS

No

SUPPORTED BY STRIPE

Yes


Selects SOFORT at

checkout

Gets redirected to

SOFORT to choose

bank

Enters account

credentials


payment is complete

(Optional) Returns


site for payment

confirmation


WeChat Pay

As China’s largest internet company, Tencent offers

a number of web and mobile products across social

networking, communications, media, games, finance,

and more. WeChat, owned by Tencent, is China’s

leading mobile app with 889 million monthly active

users.

WeChat is a leading lifestyle ‘super app’ used for

messaging between people, as well as connecting

people, services and businesses in China and around

the world through a number of e-commerce and

social features inside the app. WeChat Pay, the

payment wallet inside the WeChat app, has over 600

million users.

Chinese consumers can use WeChat Pay to pay for

goods and services inside of businesses’ apps and

websites. WeChat Pay users buy most frequently in

gaming, e-commerce, travel, online education and

food/nutrition.


China

PAYMENT METHOD TYPE

Digital wallet

PAYMENT COMPLETION



GBP, HKD, USD, JPY, CAD, AUD, EUR, NZD,

SGD


Immediate

DISPUTES

Limited


Yes / Yes

RECURRING PAYMENTS

No

SUPPORTED BY STRIPE

Yes


Alipay


Selects WeChat Pay

at checkout

Gets redirected to

WeChat Pay and

scans QR code

Enters code from

mobile into redirect

page

Gets notification

that payment is

complete

(Optional) Returns


site


6. Availability

Stripe currently supports popular payment methods around the world. Stripe will continue

to evaluate locally relevant payment methods and support those that meaningfully increase

conversion rates for its users over time.

Country of business: US EU Rest of world

ACH credit

ACH debit

Alipay

Android Pay

Apple Pay

Bancontact

Bitcoin

Credit cards

Giropay

iDEAL

SEPA Direct Debit

SOFORT

WeChat Pay

Private beta

Private beta Private beta Private beta

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

No

No

No

Documents

A guide to payment methods